OREANDA-NEWS. October 13, 2015. Fitch Ratings says in a new report that it expects the largest German multifamily housing (MFH) transactions to continue their trend of stable to positive collateral performance in the coming quarters due to a stable domestic economy. The positive performance is demonstrated by increasing rental levels, stable vacancy rates and cost ratios that are within Fitch's expectations over the last 12 months.

In its yearly report on German MFH Fitch also says it expects the sector to consolidate further, in continuation of the merger trend seen over the last 12 months. Last year saw several large mergers with Deutsche Annington's (DAIG) takeover of Gagfah group (sponsor of GRF 2013-1, GRF2013-1 and Taurus (GMF)) being the most prominent. Further market consolidation was expected after Deutsche Wohnen took over GSW Immobilien in 2013.

In the report, Fitch also says it does not expect legislation passed in spring 2015 -which limits rental increases for re-lettings at 110% of the local average rent- to reduce achievable property income in its MFH rating analysis. Likewise Fitch does not see cause for a significant impact on the average yields investors demand over the property cycle.

The report, 'German Multifamily Housing', lays out Fitch's view on the underlying trends in the asset class and summarises key metrics of Fitch-rated transactions. It is available on www.fitchratings.com or by clicking the link above.